Money Management

SAVINGS TO BUILD WEALTH

Building a wealth is like building a brick wall. You place one brick on top of another and make sure the wall is solid before you put on the next brick.

Saving to build wealth is similar –you have to set realistic goals and work to accomplish each step before moving on to the next brick, then the next row.

You may think it is hard to save. But if you set aside even small amounts on regular basis, in just a short time you can build cushion to help you weather short-term emergencies, such as car repairs or the need for a new household appliance.

The initial goal is savings account for emergencies. An emergency savings account is money you set aside to cover expenses in case you lose your job or suffer an injury that keeps you out of work.

Do you have a savings account, yet find it difficult to find money to deposit into it? This isn’t an uncommon problem and most people find it hard to save. Generally when you receive income it is either directly deposited into your checking account or you go to the bank to make a deposit. Typically these funds head straight to the checking account so they are available to pay the seemingly endless stream of bills.

Why Saving Money is Hard

Most people save money as an afterthought. When they receive income the money is allocated to bills, groceries, rent or a mortgage or daily expenses among other things. The only time adding money to savings is when there is money left over. Unfortunately with this backwards thinking there is almost never any money left over to save.

When deposits are made into a savings account automatically and regularly you don’t have to think about it and the money is deposited before you have time to worry about expenses or how much money will be left over.

Automatic  saving is Easy

Thanks to modern technology it is very easy to set up an automatic savings plan. If you currently have direct deposit through your employer you will find the easiest way to establish this is to have part of your paycheck directly deposited into your savings account as well. It doesn’t matter if it is $10 or $500, simply having this happen automatically will ensure money is saved every time you are paid.

If you don’t have direct deposit there is still an easy option available if you do your banking at a local branch. Typically your bank can link checking and saving accounts together and establish automated transfers between accounts at a regular interval that you select. So if you cash your paycheck every other Friday you could establish an automatic transfer of a set amount of money from checking to savings to coincide with this deposit.

CREDIT CARD SAVINGS

What‘s a credit card? It is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.

A credit card is different from a charge card, where a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions, and are the shape and size specified by the ISO/IEC 7810 standard as ID-1.

  • To avoid late payment fees and possible interest rate increases on your credit cards, make sure you send in your payment a week to ten days before the statement due date. Late payments on one card can increase fees and interest rates on other cards.
  • You can avoid interest charges, which may be considerable, by paying off your entire bill each month. If you are unable to pay off a large balance, pay as much as you can. Try to shift the remaining balance to a credit card with a lower annual percentage rate (APR). You can find listings of credit card plans, rates, and terms on the Internet, in personal finance magazines, and in newspapers.
  •  Be aware that credit cards with rebates, cash back, travel awards, or other perks may carry higher rates or fees.